When it comes to investing, it is all about better returns and safety of investments. However, it largely depends on the investor whether he wants to go ahead with the risk of investing with the aim of getting higher returns or prefers a guaranteed return and safety of the invested amount. If you identify yourself as a traditional investor, then you should always consider investing in a plan with guaranteed returns. There are a few reasons for this. Let us understand these reasons here.

uaranteed Income

One of the most important reasons for buying a guaranteed income plan is to get a fixed return. Such plans provide the policyholder with a guaranteed income for a fixed period. This means you can plan your finances in advance and have peace of mind knowing that you will receive a fixed income irrespective of market conditions. It ensures guaranteed income irrespective of what happens or doesn't happen in the market.

Tax Benefits

Guaranteed income plans offer you the option to save taxes. According to Bajaj Capital, policyholders are eligible for tax benefits under Section 80C of the Income Tax Act, 1961 on premiums paid for these plans. Apart from this, the income earned from these plans is also tax free under Section 10(10D) of the Income Tax Act, 1961.

Flexible payment options

Guaranteed income plans offer you flexible payment options so that policyholders can choose the frequency of income payments based on their financial needs and requirements. You can choose to pay monthly, quarterly, half-yearly or yearly, depending on your preference.

Protection against inflation

Guaranteed income plans also provide protection against inflation by offering a fixed payout that grows over time. This means that the income from the plan will grow at a pre-determined rate, helping policyholders maintain their purchasing power and meet their expenses even in times of inflation.

No market risk

Guaranteed income plans do not expose policyholders to market risk as the payouts are fixed and do not depend on market fluctuations. This makes these plans a safe investment option for individuals who want to secure their financial future i.e. those who do not want to take risks.